The Branches’ Club is tax-exempt as a registered 501(7)(C) organization. The IRS imposes certain requirements to remain compliant and thus, tax-exempt, which the Board adheres to.
One such IRS requirement limits the amount of Club revenue that may be generated from non-members. For facility reservations in which more than 25% of the attendees are non-members, the Club is required to maintain additional documentation and financial records per IRS requirements. This is applicable even if the member reserves the facility and pays the entire fee because the IRS 25% threshold is based on attendee mix, irrespective of who actually pays for the reservation fee. As such, the Board has approved an additional fee to compensate for these incremental requirements needed to retain the Club’s tax-exempt status.
Please see IRS 7.25.7 Social & Recreational Clubs Ruling & Agreements for further explanation. https://www.irs.gov/irm/part7/irm_07-025-007.html